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### Viewing cable 10PANAMA1, Senior GOP Officials Express Doubts About Contractor for

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
10PANAMA1 | 2010-01-08 17:05 | 2010-12-18 12:12 | CONFIDENTIAL | Embassy Panama

`

    VZCZCXYZ0018
    RR RUEHWEB

    DE RUEHZP #0001 0081724
    ZNY CCCCC ZZH
    R 081719Z JAN 10
    FM AMEMBASSY PANAMA
    TO RUEHC/SECSTATE WASHDC 0288
    INFO RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
    RUEAIIA/CIA WASHINGTON DC
    RUEATRS/DEPT OF TREASURY WASHINGTON DC
    RUEHZP/AMEMBASSY PANAMA
    RULSJGA/DEPT OF TRANSPORTATION WASHINGTON DC
    RUMIESS/SOUTHCOM IESS MIAMI FL

` `

    C O N F I D E N T I A L PANAMA 000001

    SENSITIVE
    SIPDIS

    E.O. 12958: DECL: 2020/01/08
    TAGS: ECON PGOV EWWT EINV PM
    SUBJECT: Senior GOP Officials Express Doubts About Contractor for
    Panama Canal Locks

    REF: 2009 PANAMA 0550

    CLASSIFIED BY: Stephenson, Ambassador; REASON: 1.4(B), (D)

    ¶1. (C) Senior GOP Officials have expressed doubts to the Embassy
    and to members of a visiting U.S. Congressional delegation about
    the ability of the GUPC Consortium led by Spanish and Italian firms
    Sacyr and Impregilo to carry out the work on the expansion of the
    Panama Canal.

    ¶2. (C) At a December 29 lunch with the Ambassador, Vice
    President/Foreign Minister Juan Carlos Varela expressed serious
    concerns about GUPC, raising the topic by saying dramatically, "The
    Canal expansion project is a disaster." He described the companies
    that are leading the consortium as being in deep financial trouble
    and expressed his dismay that the same companies that cannot do the
    Canal expansion are now trying to win the bid for the Panama City
    Metro project. "In two or three years," he continued, "it will be
    obvious this was all a failure." (Note: VP Varela is sensitive to
    possible failures with the Canal Expansion and Metro Projects,
    because his aspiration to be elected President in 2014 is currently
    highly dependent on a successful on-time completion of the
    projects. End Note.)

    ¶3. (C) Varela again voiced his concerns on January 3 in a
    conversation with DCM and visiting CODEL member U.S. Rep. Pedro
    Pierluisi of Puerto Rico. Varela told Pierluisi that the
    consortium was "very weak" and he had "real doubts" about their
    ability to perform. Separately, Varela said to DCM, "You don't
    mess around with something as important as the Canal. When one of
    the bidders makes a bid that is a billion dollars below the next
    competitor, then something is seriously wrong. Of course I hope
    for the best, but I'm afraid that Alberto [Canal administrator
    Alberto Aleman] has made a big mistake." See reftel.

    ¶4. (C) President Martinelli expressed similar doubts in a
    conversation with Ambassador on the margins of a GOP presentation
    to the CODEL on January 4. When the Ambassador asked how he
    thought the Canal expansion project was going, Martinelli grimaced
    and indicated he was a bit worried. He said that he feared that
    Canal Administrator Aleman might have tipped the bid toward the
    consortium that included CUSA, which is run by his cousin Rogelio
    Aleman.

    ¶5. (C) Comment: While we at the embassy have heard rumblings of
    tussles within the winning consortium as the lead contractor tries
    to squeeze subcontractors to bring costs down to the low winning
    bid, we have not thought the expansion project to be in any real
    trouble. Certainly Canal Administrator Aleman remains very upbeat
    about the project, both in public and in private, and we have
    always regarded him as a highly capable manager with unimpeachable
    integrity. Given that the Vice President is now raising his
    concerns with visiting Codels, however, we though it best to let
    Washington know that there are concerns and there may possibly be
    real trouble. Post provided relentless advocacy for the Bechtel
    bid on the Canal expansion and understands through our continuing
    close contacts with Bechtel that they, with their reputation for
    coming in to clean up messes, are keeping a close eye on how the
    project is advancing (or not). End comment.
    STEPHENSON

`